Broker Bell Potter has listed these two small-cap healthcare shares as ones to watch.
Healthcare can be an exciting sector of the market to be exposed to because many companies operating in this space are at the cutting edge of science and research.
Furthermore, healthcare shares remains a defensive investment due to the fact consumers will always need to access this sector regardless of economic conditions.
Let's look at what the broker has to say.
AFT Pharmaceuticals Ltd (ASX: AFP)
AFT Pharmaceuticals Ltd. develops, markets and distributes a broad portfolio of pharmaceutical products across a wide range of therapeutic categories. These are distributed across all major pharmaceutical distribution channels: over-the-counter, prescription and hospital.
It has four operating segments based on geographical location being Australia, New Zealand, Asia, and the rest of the world.
However, it generates the majority of the revenue from Australia.
The healthcare company's share price has fallen more than 20% over the last year. However it seems Bell Potter believes it has dipped into the value range.
At the time of writing, these healthcare shares are trading at $2.27 each.
Bell Potter currently has a "buy" recommendation and target price of $4.00.
If shares were to reach this target price, that would mean a 76.21% rise.
According to the broker, the company is estimated to see revenue increase from $189.36 million in 2025 to $224.97 million in 2026.
Bell Potter's report also estimated EBITDA to grow from $17.81 million to $24.39 million during the same span.
Trading View has a 12 month price target of $3.42, which, although lower, still indicates more than 50% upside.
Australian Clinical Labs Ltd (ASX: ACL)
Australian Clinical Labs Limited (ASX: ACL) is an Australian private pathology provider.
It offers a wide range of diagnostic and specialist testing services. This includes routine pathology, molecular genetics, histopathology, cardiac testing, and skin cancer care.
The healthcare company's share price has fallen more than 20% since the beginning of the year. Based on Bell Potter's recommendation, it is now undervalued.
Some of the drop could be attributed to a cybersecurity incident that exposed sensitive patient data in late February.
Its shares are currently trading at $2.72 each. Bell Potter has placed an "overweight" rating and target price of $3.45 on the healthcare company's shares.
This would indicate a 26.84% upside.
Last month, Macquarie placed a $3.15 target price on the healthcare stock, suggesting 15.81% upside.
